Why is it important to use real rather than nominal GDP figures when making comparisons of output across time periods?
a. The real GDP figures are a better measure of changes in the general level of prices.
b. The real figures will reflect changes in the quantity of output and not changes in the general level of prices.
c. The real figures will reflect changes in the general level of prices as well as changes in the quantity of output.
d. The real GDP figures adjust for changes in the level of employment.
B
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How has the distribution of income changed in the past few decades?
What will be an ideal response?
Which of the following is LEAST likely to be an outcome of a cartel as compared to the situation before the cartel was formed?
A) Cartel members charge higher prices. B) Cartel members reduce production. C) Cartel members make fewer profits. D) Cartel members do not compete with each other in pricing decisions.
Consumption goods
A. are only the goods bought by households for immediate satisfaction. B. include spending on machines and buildings so that goods can be produced in the future. C. are goods that are used to make other goods. D. include items that a supermarket holds in inventory.
Higher nominal interest rates ________ the amount of money demanded and a higher price level ________ the amount of money demanded.
A. increase; decreases B. increase; increases C. decrease; decreases D. decrease; increases